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28/09/2022 |
We are well aware of the importance of life insurance in our lives. From the pure and affordable term insurance policy to the all-encompassing comprehensive insurance plan, we seek to protect our family and achieve the various financial goals we have set for ourselves. The primary reason to buy life insurance is to get life cover so that even when we are no more, our family does not suffer any financial hardships.
What are the Types of Life Insurance Plans?
A life insurance contract is one in which the insurance company, in consideration of the premiums received from the policyholder, agrees to pay their nominee the sum assured on the policyholder’s death. This basic form is called the term insurance plan. Here are the various types of life insurance plans in India:
- Term insurance: Term insurance is a pure life insurance product that provides a death benefit to the nominee of the policy in case of the unexpected demise of the policyholder. You can choose term insurance to protect your family from any financial distress in case of your death. The premium on a term insurance policy is lesser than other life insurance products, and you must have this policy in your planning mix. If you are looking to safeguard your family financially after your unexpected demise, this is the right plan for you.
- ULIP plans: These are a systematic method to accumulate wealth through market-linked earnings. The premium is partly allocated for life cover, and the remaining is allocated in funds according to the policyholder’s risk tolerance.
- Retirement plans: These plans help you in wealth creation and you start receiving regular payouts after a certain period. There are two phases in these plans, the accumulation phase and the vesting phase. During the accumulation phase, you pay premiums and build a corpus whereas, during the vesting phase, you start receiving regular payouts. In case of your unfortunate demise during the accumulation phase, a death benefit is paid to the nominee of the policy.
- Savings plans: These plans combine an element of savings with life cover to meet your life goals. If you are looking for guaranteed1 returns along with life cover, then this plan is suitable for you.
How to Calculate Life Insurance Plans?
An insurance plan should be matched with the various personal objectives at different points in our lives. We should also consider the aspirations of our family members and design the financial planning strategy accordingly. Thus the aim should be to achieve comprehensive insurance through an appropriate mix of policies.
Considering inflation and the growth in your earnings, you should arrive at the total coverage you would need. A comprehensive policy combines basic insurance with protection and savings for growth in returns. The premium paid under all life insurance plans is eligible for tax* deduction under Section 80C of the Income Tax Act, and the death benefit received is also exempt under Section 10(10D).
We at Tata AIA offer various life insurance calculators that will help you determine the right plan according to your requirements. With our premium calculators, you can calculate the insurance policy premium that you have to pay towards a:
You can enter your details in the calculator, and you will get the premium that you have to pay for the plan that you have chosen. This will also help you compare the different plans available and choose the right plan according to your needs.
On the Tata AIA website, you will also find life planning tools that will help you decide the plans that you can take according to your specific needs.
For example, if you wish to buy a home, you can use the dream home calculator. You have to fill in all the details like your current income, savings, the type of home that you wish to buy, etc. The calculator will calculate the funds that you need and the plans that will help you achieve your goal. Similarly, there are calculators for other life goals like a dream car, your child’s future expenditure, etc.
How Can I Purchase a Life Insurance Plan?
Many life insurance companies offer a wide variety of comprehensive plans in India. For example, if you visit the Tata AIA life insurance website, you can see several Tata AIA insurance policies for meeting the varied needs of customers. If a comprehensive policy that offers coverage and savings is your requirement, you can choose the appropriate policy features and customise them for your needs. You can choose the top-up option for additional coverage, critical illness and disability riders#, flexible premium payment modes etc.
Conclusion
Life insurance is a must-have product in every individual’s financial portfolio. You can choose from several life insurance plans besides the basic term insurance so that you can derive protection with savings and growth in returns. You can also use the life insurance calculator to determine the premium you have to pay and analyze different plans. The key is to identify the correct amount of coverage at the right time and choose the policy that matches the financial objective that must be met so that you may have a stress-free life, both during your working life and in retirement.
L&C/Advt/2022/Sep/2264
